Insurance for the masses pushed

CEBU, Philippines - While only about 11 percent of Filipinos are insured or have availed of risk protection, the government has moved to encourage insurance companies to offer micro-insurance products for the masses, that would have a maximum daily premium not exceeding P20.

The Insurance Commission (IC), together with the Department of Finance-National Credit Council (DOF-NCC) have started this campaign via a nationwide Financial Literacy roadshow.

DOF-NCC director Joselito Almario said the promotion of micro-insurance in the Philippines is expected to heighten awareness of more Filipinos to take formal insurance to protect their future.

Likewise, insurance companies in partnership with people’s organizations, micro-finance, cooperatives, and community groups will be able to tap the greater number of people to get insurance premium in an affordable and attractive product, that premium cost will not exceed P20 per day.

Because of this campaign, there are now about 27 insurance providers that have partnered with different cooperatives, and community organizations to offer insurance premiums to the mainstream market.

Because of this campaign, as of January this year, there are already 3.5 million approved policies in the micro-insurance category, in both life and non-life insurance products.

Micro-insurance is considered to contribute to national poverty alleviation strategy. Almario said in order to put this strategy into action, the government has forged a partnership with the German International Cooperation—Microinsurance Innovations Program for Social Security (GIZ-MIPSS) and the Asian Development Bank-Japan Fund for Poverty Reduction (ADB-JFPR) to enhance financial literacy on micro-insurance, especially of the low-income sector.

Of the total 94 million population in the Philippines, about 25 million of whom are in the poverty line or 26.5 percent. Only 2.9 million of the 25 million population who are in the poverty line are some kind of risk protection or covered in insurance products, mostly are the informal insurance schemes offered by cooperatives, or organizations in the communities.

Despite the active stance of some insurance companies, and even cooperatives to provide risk protection or insurance to the mainstream Filipinos, this is still intimidate the low income sector, because of the high cost of premiums, and strict requirement process.

This time, through this campaign, the micro-insurance products’ requirements are streamlined, that even a barangay clearance can be accepted.

The campaign is expected to raise awareness of the majority of Filipinos to get themselves insured, without sacrificing their daily necessity, while a P20 daily premium requirement is affordable.

ADB-JFPR chief of party stressed that through this campaign, it is envisioned that future micro-insurance advocates from will help address the two causes of low insurance coverage among the low-income sector—the lack of awareness of insurance and low financial literacy level.

Access to appropriate and affordable risk protection instruments for the low-income sector faces obstacles: unaffordable and inadequate insurance products, persistence of informal insurance schemes and low appreciation of the importance of micro-insurance.

The government, through the initiatives of the IC and its partners, continues the momentum of opportunities opened by the National Strategy for Micro-insurance and the Regulatory Framework for Microinsurance launched in 2010.

Recently, the group held a roadshow in Cebu, which sought to educate representatives of both the public and the private sector about the framework and status of micro-insurance in the Philippines, emphasizing the respective roles each on can take in the advocacy of micro-insurance. - THE FREEMAN